Mini lines for a 'Mini' iPad

PALO ALTO -- The turnout for Apple's (AAPL) release of the iPad Mini on Friday morning was -- just like the new 7.9-inch tablet -- noticeably downsized.

The early-morning lines outside stores in Silicon Valley and across the world were uncharacteristically short for an Apple launch, leading some to speculate that Apple fanboys and fangirls are growing weary of frequent and hyped product upgrades. Since the first iPad hit stores more than two years ago, competitors have emerged with 7-inch tablets priced $100 cheaper.

Analysts project modest sales for the Mini this weekend, and for the fourth-generation iPad also released on Friday. By 7:30 a.m. Pacific time, a half-hour before the Palo Alto store opened its doors, about 35 customers had lined up -- a fraction of the number who scooped up the third-generation iPad on its launch day.

Brad Peterson of Los Altos was first in line at 2 a.m. When he saw the empty sidewalk outside the Apple store on University Avenue, he thought he had the wrong day.

"I go to these things all the time, and (2 a.m.) usually gets me somewhere in the middle of the line," he said.

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So he pulled out his third-generation iPad -- one of about eight tablets he owns -- to confirm the date, and with a quick Google (GOOG) search discovered that turnout was low at stores across the world. Reuters reported that crowds waiting for the newest iPad were smaller than for previous launches from Sydney to Amsterdam, with staff at the Hong Kong Apple Store appearing to outnumber customers waiting in line.

Jeff Wang turned around and went home after he found the Palo Alto store deserted at 10 p.m. Thursday night. Wang, of Saratoga, came back at 2:30 a.m. to secure the second spot in line, bewildered that there weren't already hundreds waiting by that hour.

"The last couple times I came around 11 p.m. the night before and the lines were long," Wang said.

Mike Smithwick, a San Jose app developer who waited towards the end of the line, suspected that some Apple fans had their fill with the first three releases.

"I think everyone is lined out," he said.

The iPad Mini is Apple's answer to popular 7-inch tablets like Amazon's Kindle Fire and Google's Nexus 7. But Apple priced its smaller tablet entry much higher than those competitors -- the device starts at $329, while other 7-inch tablets can cost as little as $199.

For some customers, the bigger turnoff is that the Mini is now only available on Wi-Fi; the company will release a version that connects to cellular networks in a couple weeks, when some expect to see an uptick in sales.

Analysts doubt Apple will perform as well with this launch as it has previously, with Piper Jaffray analyst Gene Munster -- an Apple bull who typically offers the highest projections for Apple sales -- forecasting opening-weekend sales of about 1 million to 1.5 million for the Mini.

BTIG research analyst Walter Piecyk said the sales total Munster predicted would be a disappointment.

"We believe Apple's first weekend sales of the iPad Mini needs, at a minimum, to top the 3 million first weekend sales of the iPad 3 in order to demonstrate that the management team can execute on ramping supply of new products and to provide some evidence that there is adequate demand for a smaller iPad at these price points," he wrote in a note Friday morning.

However, lower opening-weekend sales could help Apple avoid disappointing consumers. When the iPhone 5 debuted in September, Apple sold a record 5 million of the devices in the first weekend, but still couldn't meet demand because of production delays.

IDC analyst Ryan Reith cautioned Friday not to dismiss the Mini's popularity because of short store lines. Many customers will likely order online, he said, and others will wait until closer to the holidays.

Short lines didn't mean Apple fans were short on excitement. The modest crowd in Palo Alto joined Apple staff with loud cheers when the store opened its doors two hours early for the event. Many walked out minutes later with a grin and two Minis -- the limit for each customer. Peterson said the Minis were an early Christmas gift for his two teenage daughters -- although he had a few hours to play with the tablets while the girls were in school.

More than a few New Yorkers can expect a Mini under the tree this year. About 600 fans braved the power outages, gas shortages and hobbled transit systems left by Superstorm Sandy to line up early outside the Fifth Avenue store, according to a Bloomberg report. The New York flagship sold out of the Mini just hours after opening, and blogs and Tweets indicated that a smattering of stores across the globe had sold out by the afternoon. However, it's unclear how much stock the stores had to begin with.

Friday was the first Apple launch event for Christian Lindholm of Finland -- the startup developer couldn't resist picking up a couple Minis while in California on business.

"I have to do it in Silicon Valley," he said. "This is the store to do it. It's the grandfather store; sort of in Steve's hood."

Like others at the store, he owns a third-generation iPad -- released just seven months ago -- and won't be buying the fourth anytime soon. Several customers said they were unimpressed with the upgrades and unwilling to pay another $499 to $699 just months after the previous version was released.

Said Lindholm: "It doesn't feel like a fourth generation. It feels like a 3.2.